The times may be different, but the rules are the same...
A day, a week, a month, a quarter, a year ago in a financial world that seemed far far away, rebel investment bankers were plotting an evil takeover of the financial system we relied upon and trusted.
In these financially trying and changing times, there are time tested rules and adages that we should all keep in mind as we navigate the perils and dangers that lie ahead. While the game has clearly changed, the rules though, remain the same. Lakeside Advisors is pleased to offer the following Top 10 List for surviving these turbulent times:
o Cash is King, long live Cash.
o Two things are necessary for any chance of a successful turnaround or restructuring; TIME and MONEY; if you have one or the other you have a fighting chance, with neither, its game over. WHY? With TIME you can find MONEY; with MONEY you can buy TIME.
o Communicate, Communicate, Communicate. No one likes to be surprised, unless it’s your birthday. Make routine calls to vendors, bankers, customers and even employees. Decide what needs to be communicated and communicate it. No apologies, no sob stories, just the facts as they relate to the immediate situation.
o Vendors always want to be paid in full and on time; however, they also need to see activity on their accounts. Even if you can’t pay in full, and they won’t agree to a structured payment plan, send payments on account anyway. You’ll be surprised how quickly they cash your check. You can even “dare them” to NOT cash your check! Guaranteed, that check will be deposited the same day it’s received!
o Model, remodel, evaluate and re-evaluate your financial needs and operating performance. There is no excuse for not knowing your current month’s financial performance and where the financial pressure points are hitting. Real time MIS can spew out reports to help guide and direct planning.
o In the Draconian and Machiavellian world we find ourselves in, if your key employees aren’t contributing their best efforts, or have outgrown their effectiveness, the market place has highly qualified and available people on a variety of employment arrangements; contract labor, part time, full time and consulting opportunities now exist with very talented and qualified people. Partnerships may now exist that weren’t available before so remember, in most circumstances, strategic relationships trump purely financial ones any day.
o Make sure you understand the financial implications of your business decisions. You may have past due receivables, well over 90 days, but you are reluctant to take a discount on them because you are [understandably] concerned about writing them down or worse, writing them off. Like Monty Hall used to say on Let’s Make a Deal, take the cash!
o There is no need for a long term plan if you can’t survive the short term.
o Reconsider your org chart. Change for the sake of change doesn’t always yield improvement or efficiency but an outdated corporate structure or the wrong people in the wrong box can lead to stagnant thinking and resentment by key employees who feel they can and should be contributing more.
o There is the adage “when you find yourself in a hole, stop digging.” The hole you find yourself in can provide the opportunity to rethink your business, your employees, your competition, your vendor relationships and even your customers. A top to bottom review of how your business functions can lead to new insight, new approaches and new outcomes.
Change the paradigm, shift the focus, manage for opportunity.
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